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comment by hootsbox
hootsbox  ·  4342 days ago  ·  link  ·    ·  parent  ·  post: Your Tax Dollars Hard at Work
Good discussion B_B1, but we don't have a flat tax now (or anything close to it) because of all the deductions and loopholes. With a real "flat tax" the tax payments are scalable: if you make $1M a year and the tax is 20%, then you pay $200K in taxes. If you make $100K a year, you pay $20K in taxes. If you make $50K a year, you pay $10K in taxes. I do believe that there needs to be an exemption (and minimum tax of a small percentage so that everyone has "skin in the game") and to avoid the 48% of the "gamers" we have now that take everything the governments gives, but give absolutely nothing to the pot! I don't know exactly that point, but let’s say $35K and under for a starting point. Those folks have to pay around $1K a year in taxes. This is scalable, everyone pays the same "fair" amount, and the income to the federal and state governments is much more predictable and better able to fit into a real "zero" based budgeting process.

As to mortgages and charities, it has been studied that getting rid of mortgage deductions would actually spur homeownership because the people have more disposable income in their pockets, or at least know what their tax expenditures are to better plan a savings plan for down payments. The same could hold true for charities. I have looked at plans that leave only those two in place, and that may be a good compromise, but cut all the other deductions and loopholes.





b_b  ·  4341 days ago  ·  link  ·  
For the most part I agree that if you make X, you should pay Y. Take three guys in their 30s, each are making $50,000, but one has 2 kids, one has a mortgage, and one is a single renter. The guy who is the renter probably lives the most carefree lifestyle, and thus likely is least burdensome on the system, but he definitely has the highest tax bill, because he only gets a standard deduction; the system is backwards, if anything!

Charities are a tough one. If I didn't get a deduction for the couple hundred bucks I give to charitable organizations every year, I would still give. Its such a small amount of money that I don't really care too much about the tax savings. But a lot of charities or non-profits are sustained by massive contributions from very wealthy people. For instance, in the hospital in which I work there is a public area that honors anyone who has given more than $1,000,000. These people absolutely would not give that kind of cash if it weren't tax deductible. It would be harmful to a lot of good organizations if the charitable deduction were taken away, but you can't really say that my $100 isn't deductible but her/his $100,000 is. For that reason, I would leave the charity deduction.

Europe is a good example. They don't have charitable deductions in any Western European country, and the result is that all the art museums, hospitals, food banks, etc. are run by the governments for the most part. I don't like the look of that for the US, and I'm going to go out on a limb and say you probably don't either.